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News

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07 May 2019Rand ignores improved confidence on pre-election nerves+

The SACCI Business Confidence Index increased somewhat to 93.7 in April from the previous 91.8. The rand is unresponsive to the good news, remaining largely flat since markets opened this morning in anticipation of the election take place tomorrow. The ZAR is currently at R14.47/$.

23 Apr 2019Rand tumbles as US markets open+

The rand has tumbled as US markets have opened, with the local unit losing close to 0.9% during trade on Tuesday. The rand’s decline can be largely attributed to the bailout of embattled state-owned enterprise Eskom as well as Trump entering into a trade conflict in the European Union, promising retaliation with regards to tariffs.

17 Apr 2019Rand steady on benign inflation figures+

Consumer inflation remains well within target range at 4.5% year-on-year for March 2019, undershooting the expected rate marginally. An uptick in inflation since the low of 4% recorded for January 2019 has largely been the result of an increase in fuel prices while May 2019 will see yet another hike.

The rand has gained about 0.9% against the dollar today, to break below R14.00/$. It has been driven mostly by the positive emerging market backdrop but also in anticipation of the release of the FOMC minutes tonight. There is no interest rate announcement, but the market is expecting the Fed to hold quite a dovish stance. All indications show that there is a slowdown in the American economy and the fear of recession is weighing quite heavily on the Fed at the moment.

30 Mar 2019Rand positive on Moody’s news+

On Friday ratings agency Moody's opted to skip the review on SA, leaving the local credit rating unchanged at one notch above junk status. The expectation had been for the agency to adjust the outlook downward, however Moody’s decision not to review means SA is left with a stable outlook.

28 Mar 2019Rand stumbles on SARB interest rate announcement+

As expected, the South African Reserve Bank’s Monetary Policy Committee (MPC) announced that interest rates will remain unchanged. The rand is continuing to tread water in the wake of the announcement, as emerging market weakness dominates the field.

27 Mar 2019Rand slips as it tracks Turkish lira lower+

The rand is slipping as it tracks the Turkish lira lower. Poor investment sentiment coupled with high levels of foreign debt obligations continue to weigh on Turkey, even as the Central Bank steps in to stabilise the lira. The rand is currently trading at R14.65/$.

The rand gained 1.9% against the USD and 1.2% against the EUR on the back of a more dovish than expected Fed on Wednesday evening to trade at R14.22/$ and R16.26/€
This is excellent news in light of the increasing inflation pressure – local CPI rose slightly to 4.1% in February 2019 from 4% in January, matching market expectations, largely due to fuel costs.

07 Mar 2019Rand slumps on talk of SARB nationalisation+

President Ramaphosa announced in parliament on Thursday, 7 March 2019, that South Africa is going to move ahead with the nationalisation of the South African Reserve Bank. The rand is trading weaker as a consequence and is currently priced at R14.34 to the US dollar.

The better-than-expected GDP growth rate of 0.8% for 2018, and 1.1% for Q4 2018 versus 0.6% year-on-year, saw the rand gain some momentum against the greenback, recovering 0.5% to R14.14 after reaching lows of R14.28 during trade yesterday. The recovery is hampered by the weak Q4 GDP quarter-on-quarter, seasonally adjusted annualised figure of 1.4% falling short of the expected 1.8%.